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The income of the primary sector in Latin America

Edgar Sanchez Pujals - 2/03/2016

The income of the primary sector in Latin America

For more than 40 generations in the Latin American model has generated both an economic and food model that encouraged large differences in inequality among the population. This has led to a slow educational, cultural, economic, technological and industrial development of several of these countries. Fortunately it seems that the 2000s brought major changes in the distribution trends worldwide. European countries, the United States and China continued their upward trend in inequality, while in Latin America and Southeast Asia reversed the previous growth trend and begin to show declines in the Gini rate as is observed in graph No. 1. For Latin America, it is set to end a promising stage after worsening distribution indicators of the previous decade, although in international terms the position of Latin America and the Caribbean remains the region most unequal in the world.

During the period 2002-2013, in 15 of the 17 countries considered distributive improvements, reflected in the decline in the Gini index (see chart No.1) are evident. The exceptions are Costa Rica and the Dominican Republic, whose Gini indices are higher in 2013 than in 2002. This recent trend is statistically significant and took place in a context of sustained economic growth with poverty reduction in the region downward.

Chart No.1

Latin America (17 countries): income inequality, 2002 and 2013

(Percentages)

Gini index – mathematical measure of inequality

Source: 2002-2013 year. Adapted CEDEF.ITAM

Globally and in most countries surveyed the majority of the population is overfed with animal protein and other major consuming low nutritional quality food with high carbohydrate content. Inequality in consumption, since more than half a century was increased by the marked difference in income among the population. This remarkable difference in income is a result of reflection and the creation of discriminatory production and distribution structure prevailing in these countries.

Nearly 63% of people in rural communities do not have enough income to buy a basic food basket or to cover a basic food needs. If we take into account other aspects, only 17% of the population has access to credit cards to pay for their purchases with new money. If we analyze the primary sector, we see that in rural areas where the majority of GDP about 89% of people have no access to formal credit or unemployment benefit is generated. The lack of credit with farmers, small farmers and peasants are often conditional and subject to change props in political votes. With these all and joined heavy weight of small and medium enterprises in Latin America (No. table. 1) we see very often precarious employment.

Table No.1

Latin America: Number of enterprises by size in 2013

(Percentages)

Source: Adapted 2013. FAOSTAT.FAO.ORG

Basic wages and the unequal distribution of income in Latin America is a general fact in these countries. Income inequality creates an uneven pattern of consumption. Very briefly we can see a lack of equity in the production and distribution structure that has triggered hunger, unemployment and often violence. These three problems demand an urgent action plans and measurable draft commitments, in line with the interests of the population of each country.

For more than 40 generations in the Latin American model has generated both an economic and food model that encouraged large differences in inequality among the population. This has led to a slow educational, cultural, economic, technological and industrial development of several of these countries. Fortunately it seems that the 2000s brought major changes in the distribution trends worldwide. European countries, the United States and China continued their upward trend in inequality, while in Latin America and Southeast Asia reversed the previous growth trend and begin to show declines in the Gini rate as is observed in graph No. 1. For Latin America, it is set to end a promising stage after worsening distribution indicators of the previous decade, although in international terms the position of Latin America and the Caribbean remains the region most unequal in the world.

During the period 2002-2013, in 15 of the 17 countries considered distributive improvements, reflected in the decline in the Gini index (see chart No.1) are evident. The exceptions are Costa Rica and the Dominican Republic, whose Gini indices are higher in 2013 than in 2002. This recent trend is statistically significant and took place in a context of sustained economic growth with poverty reduction in the region downward.

Chart No.1

Latin America (17 countries): income inequality, 2002 and 2013

(Percentages)

Gini index – mathematical measure of inequality

Source: 2002-2013 year. Adapted CEDEF.ITAM

Globally and in most countries surveyed the majority of the population is overfed with animal protein and other major consuming low nutritional quality food with high carbohydrate content. Inequality in consumption, since more than half a century was increased by the marked difference in income among the population. This remarkable difference in income is a result of reflection and the creation of discriminatory production and distribution structure prevailing in these countries.

Nearly 63% of people in rural communities do not have enough income to buy a basic food basket or to cover a basic food needs. If we take into account other aspects, only 17% of the population has access to credit cards to pay for their purchases with new money. If we analyze the primary sector, we see that in rural areas where the majority of GDP about 89% of people have no access to formal credit or unemployment benefit is generated. The lack of credit with farmers, small farmers and peasants are often conditional and subject to change props in political votes. With these all and joined heavy weight of small and medium enterprises in Latin America (No. table. 1) we see very often precarious employment.

Table No.1

Latin America: Number of enterprises by size in 2013

(Percentages)

Source: Adapted 2013. FAOSTAT.FAO.ORG

Basic wages and the unequal distribution of income in Latin America is a general fact in these countries. Income inequality creates an uneven pattern of consumption. Very briefly we can see a lack of equity in the production and distribution structure that has triggered hunger, unemployment and often violence. These three problems demand an urgent action plans and measurable draft commitments, in line with the interests of the population of each country.